SolvedCOM122040 | Repayments/reallocations: non automatic reallocations: surrender COTAX repayment to COTAX
From HM Revenue & Customs · COTAX Manual
It is important that you prevent COTAX from automatically processing an overpayment if a company gives notice of surrender of all or part of it under S963 CTA 2010 or the extension under Regulation 9 of the CT Instalment Payments Regulation 1998.
Interest
Treat the recipient company as having paid any interest under Section 87A (S87A) Taxes Management Act (TMA) 1970 that the surrendering company has paid in respect of the surrendered refund (S964(4)). COTAX cannot calculate this.
You must calculate it:
in accordance with Step 4 of the COM122043 Action Guide
enter it in the Related Interest field when you make the reallocation
COTAX then makes a payment type posting of this amount against the interest liability of the recipient company.
Section 963/Reg 9 can only apply when all the relevant conditions are met, see COM122020 for more information. It is important that companies do not gain the interest advantages of Section 963/Reg 9 when they do not meet these conditions. See COM122070 for information about handling requests to set off a potential repayment due to one company against a liability of another company when Section 963/Reg 9 does not apply.
When the notice relates to an ‘early repayment’, deal with the surrender using Function REWD (Direct Reallocation Within COTAX) in the usual way. See COM125000 for more information.
Tax-related penalties
Following the reallocation of a S963/Reg 9 Surrender, COTAX calculates any tax-related payable by the recipient of the surrender automatically, taking account of the restriction in Section 964 (S964)(3) Corporation Tax Act (CTA) 2010.
Accidental repayments after a surrender notice is received
A company may have received a repayment despite a valid notice given under S963 CTA 2010/Reg 9. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
See: